GUANGZHOU AUTOMOBILE GROUP CO., LTD. 廣州汽車集團股份有限公司 (A Joint Stock Company Incorporated in the People’S Republic of China with Limited Liability) (Stock Code: 2238)
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Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. GUANGZHOU AUTOMOBILE GROUP CO., LTD. 廣州汽車集團股份有限公司 (a joint stock company incorporated in the People’s Republic of China with limited liability) (Stock Code: 2238) 2016 INTERIM RESULTS ANNOUNCEMENT I. IMPORTANT NOTICE (I) The Board, the supervisory committee and the directors, supervisors and senior management of the Company warrant that the contents contained herein are true, accurate and complete. There are no false representations or misleading statements contained in or material omissions from this announcement, and they will jointly and severally accept responsibility. (II) All directors of the Company have attended the meetings of the Board. (III) The interim financial report of the Company is unaudited. The Audit Committee of the Company has reviewed the unaudited interim results of the Company for the six months ended 30 June 2016 and agreed to submit it to the Board for approval. (IV) Zhang Fangyou, the Chairman of the Company, Zeng Qinghong, the General Manager of the Company, Wang Dan, the person in charge of accounting function and Li Canhui, the manager of the accounting department (Chief of Accounting), warrant the truthfulness, accuracy and completeness of the financial report contained in this announcement. (V) The Board of the Company proposed payment of interim dividend of RMB0.8 (tax inclusive) in cash for every 10 shares to all shareholders. (VI) The forward-looking statements contained in this announcement regarding the Company’s future plans and development strategies do not constitute any substantive commitment to investors and investors are reminded of investment risks and to exercise caution in their investment. (VII) There is no non-operational appropriation of the Company’s funds by its controlling shareholders and their connected parties. (VIII) The Company has not provided any third-party guarantees in violation of stipulated decision- making procedures. 1 II. CHAIRMAN’S STATEMENT Business Review During the first half of the year, China adhered to the general principle of seeking progress while keeping performance stable, expanded demand appropriately and continued to implement positive fiscal policies and prudent monetary policies; and focused on pushing forward supply-side structural reform, strongly, suitably and effectively implemented the key tasks of “cutting over capacity, destocking, deleveraging, reducing costs and identifying growth areas” and comprehensively pushed forward “replacing business tax with value-added tax” pilots. Against the backdrop of continuously slow growth in the global economy, signs of stabilization were seen in the economy of China. Compared with the corresponding period last year, China’s GDP grew by 6.7%, CPI increased by 2.1%, PPI narrowed successively and the macro-economy showed a stabilising and positive trend in the first half of the year. According to the data of China Association of Automobile Manufacturers, the overall sales growth of domestic automobile for the first half of the year grew steadily and the extent of growth was significantly higher than the corresponding period last year. The sales growth of SUV, MPV sectors and new-energy vehicles maintained at a high level. The production and sales of vehicles amounted to 12,892,200 units and 12,829,800 units, respectively in the first half of the year, representing increases of 6.47% and 8.14%, respectively, as compared with the corresponding period last year, and the growth rates of which increased by 3.83 and 6.71 percentage points, respectively, as compared with the corresponding period last year, of which the production and sales of passenger vehicles amounted to 11,099,400 units and 11,042,300 units, respectively, representing increases of 7.32% and 9.23% as compared with the corresponding period last year; the production and sales of SUV amounted to 3,903,900 units and 3,850,100 units, respectively, representing increases of 42.70% and 44.26%, respectively, as compared with the corresponding period last year, with the sales growth slightly slower than the corresponding period last year; the production and sales of MPV amounted to 1,187,100 units and 1,199,900 units, respectively, representing increases of 12.34% and 18.06%, respectively, as compared with the corresponding period last year, and the sales growth was higher than the corresponding period last year, but the production and sales of sedans decreased 5.52% and 3.91% respectively; and the production and sales of commercial vehicles amounted to 1,792,700 units and 1,787,400 units, respectively, representing increases of 1.50% and 1.87%, respectively, as compared with the corresponding period last year. In addition, the production and sales of new-energy vehicles amounted to 177,000 units and 170,000 units in the first half of the year, representing an increase of 125.0% and 126.9% as compared with the corresponding period last year. The production and sales of motorcycles experienced consistent downturn and the extent of decrease continued to increase in the first half of the year, amounted to 8,163,800 units and 8,157,700 units, respectively, representing decreases of 14.44% and 15.01%, respectively, as compared with the corresponding period last year. The production and sales of vehicles of the Group together with its joint ventures and associated companies were 744,000 units and 731,900 units respectively, representing increases of 29.59% and 28.74% respectively compared to the corresponding period last year, of which the production and sales of SUV amounted to 350,200 units and 343,500 units, representing increases of 129.33% and 127.19% as compared to the corresponding period last year; the production and sales of motorcycles amounted to 459,000 units and 449,700 units, representing decreases of 11.60% and 15.32% respectively as compared 2 to the corresponding period last year. Together, the operating income was approximately RMB123.233 billion, representing an increase of approximately 29.40% as compared with the corresponding period last year. The consolidated operating income of the Company amounted to approximately RMB21.429 billion, representing an increase of approximately 87.15% as compared with the corresponding period last year; the net profit attributable to shareholders of listed company amounted to RMB3.982 billion, representing an increase of approximately 127.54% as compared with the corresponding period last year; earnings per share was approximately RMB0.62, representing an increase of approximately 127.54% as compared with the corresponding period last year; and return on net assets was approximately 9.76%, representing an increase of approximately 4.93% as compared with the corresponding period last year. During the first half of the year, the Group closely followed the objectives, thinking and tasks ascertained in the beginning of the year, insisted on seeking progress and achievement in stable development, identifying issues early, coordinating effort of all staff members, targeting efforts and taking proactive measures to effectively boost sales in the market. As a result, the year-on-year growth rate of its vehicle sales was approximately 20 percentage points higher than industrial average and its market share increased by 0.9%. The Group accomplished “half of the mission within half of the time” in terms of key operating indicators. Both quality and effectiveness of its operation were enhanced which laid a solid foundation for the beginning of the Thirteenth Five-Year Plan. Prospects In the second half of the year, global trade and market demand would remain subdued. The real economy of China would still be difficult and consumption growth will be stable albeit with tendency to decline. China’s economy will continue to be under downward pressure. Nevertheless, the economy of China continues to retain its upward trend in the long run, and the economy is robust, has great potential and plenty room for maneuvering while the growth momentums of hi-tech sectors, new operation formats and new business models are accelerating. Following further effort being put into the supply-side structural reform, launching of various supporting measures for deepening the reform of state-owned enterprises, active nurturing of new economic structure and reinforcing new development drivers through prudent monetary policies, it is expected that the economy will maintain its stable growth and the annual GDP growth will be around 6.5-7%. Driven by factors such as new-type industrialization, urbanization, additional purchase and trade-in, energy-saving subsidies, levying half of purchase tax for vehicles below 1.6L and rigid demand for automobiles, the automobile market will still enjoy growth brought by structural demand. Meanwhile, due to the large number of existing car ownership, together with buying restrictions in major cities, traffic jams, difficult and expensive parking, the economy of sharing and the inhibition against automobile consumption resulting from pressure on energy conservation and environmental protection, it is expected that the annual growth rate of automobile sales in 2016 will be approximately 6.1%. 3 In the second half of the year, the Group will